Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
| 24(1) |
5-9053 |
| |
D.S. Delorey |
| |
(613) 957-3495 |
Attention: 19(1)
December 5, 1989
Dear Sirs:
Re: Registered Retirement Savings Plan ("RRSP") Qualified Investments
This is in reply to your letter of September 21, 1989, referred to us for reply, requesting our views on whether or not a trust governed by an RRSP has acquired a qualified investment in the following situation:
"The trust loans money to an investment dealer. The investment dealer delivers bonds, having fair market value of 110% of the amount of the loan, to the trust to be held by the trust as collateral until such time as the investment dealer pays the loan, plus interest, to the trust."
Generally speaking, a debt owing by an investment dealer to a trust governed by an RRSP would represent a qualified investment of the trust only where the debt is an obligation of a type described in either
(a) subparagraph 146(1)(g)(ii) of the Act (i.e. a bond, debenture, note or similar obligation of a corporation the shares of which are listed on a prescribed stock exchange in Canada), or
(b) paragraph 4900(1)(i) of the Income Tax Regulations (i.e. a bond, debenture, note or similar obligation of a Canadian corporation where one of the conditions described in any of subparagraphs 4900(1)(i)(i), (ii) or (iii) is met).
Whether or not an investment acquired by the trust is one described in either (a) or (b) above is a question of fact.
The above comments reflect an expression of opinion only and, as such, they are not binding on the Department. We trust, however, that they will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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